Edmonton Motors Ltd. v. Edmonton Savings & Credit Union Ltd., (1988) 85 A.R. 29 (QBM)

• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 17, 1988
• Citations: (1988), 85 A.R. 29 (QBM)

Edmonton Motors v. Edmonton Savings (1988), 85 A.R. 29 (QBM)

MLB headnote and full text

Edmonton Motors Limited v. Edmonton Savings & Credit Union Ltd.

(Action No. 8703 00755)

Indexed As: Edmonton Motors Ltd. v. Edmonton Savings & Credit Union Ltd.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Funduk, Master in Chambers

February 17, 1988.

Summary:

Abraham was the named payee of a cheque for $9,000.00 U.S. drawn on a United States bank. He arranged to purchase a truck from the plaintiff Edmonton Motors. He went to the defendant credit union and deposited the $9,000.00 cheque in his account. He then sought to have a cheque for $12,240.00 certified to give to Edmonton Motors for the truck. The credit union contacted by telephone the bank in the United States on which the $9,000.00 cheque was drawn to ensure that it would be honoured before it certified the $12,240.00 cheque for Abraham. Upon being satisfied that the $9,000.00 cheque would be honoured the credit union certified the $12,240.00 cheque. Abraham gave the cheque to Edmonton Motors and obtained possession of the truck. The credit union was then advised that the $9,000.00 cheque would not be honoured, which meant that there were insufficient funds in Abraham's account to cover the $12,240.00 cheque. The credit union therefore dishonoured the $12,240.00 certified cheque when it was presented to the credit union by Edmonton Motors. Edmonton Motors commenced an action against the credit union for the $12,240.00. Edmonton Motors then applied for summary judgment. A Master of the Alberta Court of Queen's Bench allowed the application for summary judgment.

Banks and Banking - Topic 3504

Cheques - Payment of - Presentment within a reasonable time - The Bills of Exchange Act, ss. 86 and 166, provided that cheques must be presented for cashing within a reasonable time - A Master of the Alberta Court of Queen's Bench stated that those sections do not give protection to the drawee of the cheque but are designed to protect drawers and endorsers - See paragraphs 72 to 84.

Banks and Banking - Topic 3508

Cheques - Payment of - Certified cheques - General - A Master of the Alberta Court of Queen's Bench discussed the effect of a bank certifying a cheque - See paragraphs 30 to 93.

Banks and Banking - Topic 3508

Cheques - Payment of - Certified cheques - General - A Master of the Alberta Court of Queen's Bench discussed whether certification of a cheque by a bank also constitutes acceptance of the cheque by the bank - See paragraphs 53 to 64.

Banks and Banking - Topic 3508

Cheques - Payment of - Certified cheques - General - A Master of the Alberta Court of Queen's Bench discussed the position of a bank which certifies a cheque at the request of the drawer as against the holder of the cheque - See paragraphs 30 to 93.

Banks and Banking - Topic 3508

Cheques - Payment of - Certified cheques - General - Glynn gave a cheque to Abraham for $9,000.00 - Abraham wished to deposit the cheque in his credit union account and get a certified cheque for $12,240.00 to give to Edmonton Motors to purchase a truck - The credit union telephoned the bank upon which the $9,000.00 cheque was drawn to ensure that it would be honoured - After the conversation the credit union certified the $12,240.00 cheque, believing the $9,000.00 one would be honoured - Abraham took the $12,240.00 cheque to Edmonton Motors and took possession of the truck - Subsequently the credit union would not honour the $12,240.00 cheque when it was presented to it by Edmonton Motors, because it learned that the $9,000.00 cheque would not be honoured - A Master of the Alberta Court of Queen's Bench ordered the credit union to pay Edmonton Motors the $12,240.00 plus interest.

Negotiable Instruments - Topic 4201

Cheques - Rights of holder in due course - General - [See Banks and Banking - Topic 3508 immediately above].

Cases Noticed:

Gaden v. The Newfoundland Savings Bank, [1899] A.C. 281 (P.C.), consd. [para. 31 et seq.].

J. Spadafora & Co. v. Toronto-Dominion Bank, 7 O.R.(2d) 315 (H.C.), refd to. [para. 43].

Swartz v. Toronto Dominion Bank, 27 D.L.R.(3d) 42 (Ont. D.C.), consd. [paras. 44-47].

Bank of Baroda Ltd. v. Punjab National Bank Ltd., [1944] A.C. 176, consd. [paras. 47, 48].

Imperial Bank of Canada v. Bank of Hamilton, [1903] A.C. 49 (P.C.), refd to. [para. 50].

Broadhead v. Royal Bank of Canada, [1968] 2 O.R. 717 (H.C.), refd to. [para. 51].

Northern Bank v. Yuen (1909), 11 W.L.R. 698 (Alta. S.C.), refd to. [para. 51].

Maubach v. Bank of Nova Scotia, 60 O.R.(2d) 189 (H.C.), affd. 25 O.A.C. 211, consd. [paras. 54-61].

Statutes Noticed:

Bills of Exchange Act, R.S.C. 1970, c. B-5, sect. 86, sect. 166 [para. 73].

Authors and Works Noticed:

Crawford and Falconbridge, Banking and Bills of Exchange (8th Ed.), vol. 2, generally [paras. 38, 76]; pp. 1560 [para. 78]; 1758 [para. 79]; 1762-1763 [para. 82]; 1793 [para. 52].

Geva, Benjamin, Irrevocability of Bank Drafts, Certified Cheques and Money Orders (1986), 65 Can. Bar Rev. 107 [para. 53].

Counsel:

J. Masson, Nicholl & Akers, for the plaintiff;

P.E. Odynak, Duncan & Craig, for the defendant.

This application was heard before Master Funduk of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following decision on February 17, 1988.